James Lee Witt, right, listens to BP PLC CEO of Gulf Coast Restoration Organization Bob Dudley as he speaks at a news conference to announce Witt's hiring as an advisor to BP's Deepwater Horizon oil spill response in Biloxi, Miss., Friday, July 30, 2010.Witt, the former FEMA director under President Bill Clinton, is expected to advise BP through its long-term response and recovery efforts.

If BP is to succeed going forward, then newly named CEO Bob Dudley must identify and successfully address the major psychological weaknesses in BP's corporate culture.

In my 2008 book, "Ending the Management Illusion," I profiled BP as an example of a company possessing virtually all of the psychological weaknesses of companies headed for disaster: excessive optimism, overconfidence, choosing high risk to avoid having to accept an unfavorable outcome and turning a blind eye to warning signals.

BP's weaknesses led it to engage in excessive cost-cutting and to take disproportionate risks with respect to the environment, worker safety, national security and its own profitability. I wrote about BP's problematic ethics - that despite being hailed by the financial media for its corporate citizenship, its rhetoric and deeds about social and environmental responsibility were diametrically opposed. And I pointed out that these negative inclinations were all baked into its corporate culture.

-- Excessive optimism led BP to underestimate the likelihood that sediment was corroding the Alaska pipeline carrying its oil from Prudhoe Bay.

-- Overconfidence led it to underestimate the risks associated with the storage of liquid hydrocarbons in Texas City.

-- In an effort to avert a certain loss when its rigs were over budget and behind schedule, BP pressured its subcontractors in the Gulf of Mexico to take imprudent risks.

To be fair, former CEO Tony Hayward inherited a company with a diseased corporate culture from his predecessor, Lord John Browne.

When Hayward took control of the company, he tried to address some of the disease's symptoms, especially poor safety. But he clearly had no idea about how to treat the disease.

If Dudley is to succeed where Hayward failed, he will have to draw on the lessons of companies that have developed healthy corporate cultures with robust processes for addressing psychological weaknesses. That includes identifying and planning for psychological biases, creating incentives that reward performance relative to established standards, and requiring the sharing of information about critical issues among the entire workforce.

Dudley could take a leaf from Ford CEO Alan Mulally's playbook. Mulally has slowly been nursing that once-sick company back to health with sensible processes such as regular Thursday meetings with the heads of Ford's business units. In those meetings, executives share information about the status of the firm's financial plan. Another major accomplishment: changing Ford's incentive structure so that Ford executives are willing to share bad news. Notably, Ford returned to profitability in the second half of last year after having experienced four years of red ink. And on July 23, it reported its best quarterly results in the last six years.

Most notably, BP can begin to revamp its processes by vastly improving its standards for risk management. While we do not yet know the full story about the gulf disaster, it is clear that BP chose a well design for Deepwater Horizon that was much riskier, and ostensibly less costly, than the designs used by competitors like Shell. Showing characteristic excessive optimism and overconfidence, BP chose a well design that featured fewer barriers to oil and gas escaping to the surface than did Shell. While for Shell safeguards like the blowout preventer were a last resort on top of many other measures, for BP, those other measures were lacking. Going forward, BP needs to adopt Shell-like standards, practices and multiple safeguarding procedures for risk management in deepwater wells.

We could miss the forest for the trees in this case. The daily headlines focus almost exclusively on the details associated with Deepwater Horizon. However, an equally important issue for the future involves what BP must do to heal its problematic corporate culture.